Google Hoarding $48 Billion in Cash for Acquisitions, CFO Says
The big pool of money gives the search giant a "strategic ability to pounce" on opportunities that arise, according Google CFO Patrick Pichette.Google has stashed away $48 billion in cash to give it free rein and lots of financial options in the marketplace should tantalizing acquisition targets show up in its cross hairs. That's what Google CFO Patrick Pichette recently told a crowd at a technology conference held by Morgan Stanley in San Francisco, according to a report from the Associated Press.
"It serves the shareholder best to actually have that strategic ability to pounce" if a ripe acquisition target should pop up, Pichette said at the conference, AP reported.
Google has made more than 200 such acquisitions since its initial public offering (IPO) in 2004, including many smaller startups and larger purchases, such as the 2006 purchase of YouTube for $1.65 billion and the 2007 acquisition of DoubleClick for more than $2 billion.In May 2012, Google made big headlines when it paid $12.5 billion for Motorola Mobility in a deal that aims to revive Motorola's mobile phone business and bring value from its vast patent portfolio. In December, Google sold off the Motorola unit's set-top box division, earning back $2.35 billion in cash and stock, as it got rid of a piece of the business that it didn't value.
At the tech conference, Pichette said the company is confident Motorola's cell phone business will eventually bounce back, AP reported. "These are not easy transitions," he said. "We have great plans for Motorola. There is still really hard work to be completed at Motorola before we see tangible signs [of progress]."The big pile of money that Google has amassed for such acquisitions is actually not a surprise, said Rob Enderle, principal analyst at Enderle Group. "I think Apple's got about $140 billion" in a similar fund, while "Microsoft typically holds back about $50 billion in liquid assets as well," Enderle said. "For large companies in this space, it's not unusual to hold that kind of money. It's often the way they get new technologies by acquiring incubator firms. It's kind of the way the Silicon Valley works."